Sartaj Aziz

Former Finance Minister and Foreign Minister, Pakistan

Perspective

800 million hungry: Why have we made so little progress?

It is a great irony of history that in tackling the second most important unfinished task of the 20th century, namely eradicating poverty (the first being establishing durable peace), the developing countries face a very unfavourable global environment. This should be clear from the following distortions and inequities:

The global trading and financial system is working against the longer-term interest of low-income countries and poor people, and does not provide a level playing field or a truly competitive market. The WTO's policy of liberalizing trade concentrates on high tech products largely of interest to developed countries and a few middle-income countries and the multinational companies. Simple manufactures like textiles and leather goods, which are of greater interest to low-income developing countries, are still subject to quotas and protectionist policies. Movement of labour, which is an important factor in the production cycle, is also seriously restricted.
The developed countries are providing subsidies totalling $350 billion a year to their agriculture sector, which is almost six times the total Official Development Assistance (ODA) provided to developing countries. The developing countries, and particularly the 48 least developed countries, which primarily depend on agricultural exports, cannot compete in the international market with these subsidized exports from the developed countries. This has not only reduced the share of developing countries in global agricultural trade but has also weakened their incentive system for increasing domestic production.
The flow of ODA, which was partly a compensation for the inequities of the global system, has declined from $87 billion to $61 billion in the past 10 years. If by some miracle the $61 billion could directly reach the 1.2 billion very poor people, it will mean an addition of only $50 per year to their incomes - paltry $4 per month. In practice, less than 10 percent of ODA actually reaches the poor.

While world leaders are slowly beginning to realize the full implications of these inequities in the global system, the civil society in Europe and America has been shocked into action. The past two years have witnessed an unprecedented public uproar about the impact of globalization on the poor. Ever since that fateful meeting of WTO in Seattle in November 1999, the size and intensity of public protest has been growing at each of these meetings. But after these meetings, there is very little in-depth discussion of the real issues that these protestors have been raising or to fully grasp the grave realities in the developing world.

The basic message that protestors have been trying to convey is very simple: the global development crisis that the poor face today cannot be solved in purely market terms. The poor do not have much income, so they cannot enter the market in the first place. Secondly, if goods are scarce, prices will rise, the rich or middlemen will buy and the poor will starve. Thirdly, if there is a glut, the prices will drop and the small farmer will be ruined because he or she cannot hold on to their produce for very long. Fourthly, prices and markets are always manipulated by the powerful companies or countries, to the disadvantage of poor people and poor countries.

The inherent inadequacies of an unregulated market system are fully understood in the more advanced societies. That is why they have created laws and institutions against monopolies to protect the consumer and small businesses; they have developed an elaborate system of taxation and social security to protect the weak and assist the poor. But, at the global level, they refuse to recognise the impact of unjust or inappropriate globalization policies on the poor and evolve similar taxation or social security policies at an international level.

The European Community has taken a leading role in saving the Kyoto protocol on global warming. Can we expect similar bold leadership from Europe in another area that will affect the future of mankind, by evolving the concept of sustainable development that is more meaningful for the largest majority of people in developing countries, and by supporting global policies and programmes that will not, as a minimum, discriminate against developing countries?

As the late Barbara Ward said so prophetically 25 years ago: "Unless drastic changes are made in our global system, we are to move into an epoch in which world markets will, even more decisively than in the colonial period, impoverish the already poor and even transfer income from poor to rich." Let us all work together to ensure that this does not happen.